Norman Harsono, Jakarta – Publicly listed renewables developer PT Terregra Asia Energy has struck an agreement with state-owned construction firm PT Waskita Karya, with the latter set to build mega projects comprising seven hydro power plants worth Rp 12.5 trillion (US$897.74 million) on Sumatra Island.
The projects consist of five mini hydropower plants (PLTMH) in North Sumatra and two hydropower plants (PLTA) in Aceh, according to the companies' joint statement on Wednesday. The North Sumatra's plants combined capacity is 42.98 megawatts (MW) and the Aceh plants' is 467 MW.
"Indonesia has huge renewable energy potential," said Terregra president director Djani Sutedja. "Terregra Asia Energy continues to conduct research and development to contribute toward meeting Indonesia's renewable energy needs."
Many studies predict Indonesia will miss its renewable energy commitment of a 23 percent green energy mix by 2025 at the current pace. A mere 9.15 percent of Indonesia's energy in 2019 came from renewables, and several studies have predicted that Indonesia will miss the target.
Terrega wrote that it has secured power purchase agreements (PPA) – the document that determines a developer's income – with state-owned electricity monopoly PLN for the five mini plants in North Sumatra. Meanwhile, Terregra has finished feasibility studies and secured regional-level permits for the two plants in Aceh but there was no mention of their PPA status.
Djani added that the mini plants were expected to begin commercial operation 24 months after the start of construction while for the larger plants it would be 36 months.
"[Waskita] is very ready to support [Terregra] as the engineering, procurement and construction [EPC] contractor in planning and executing these seven projects," said Waskita EPC division senior vice president Purma Yose Rizal.
Terregra finance director Daniel Tagu Dedo said the company would finance the seven projects through equity and debt financing, which included a plan to issue green bonds and rights issues.